Greenfield projects
Timeline
At the end of 2011 we had 6 greenfield projects: Shopping Estação BH, São Bernardo, Londrina Norte Shopping, Catuaí Shopping Cascavel, Contagem and Shopping Vila Velha.The first three are scheduled for inauguration this year, while Cascavel and Contagem are expected to open in 2013 and Vila Velha in 2Q14. We added Guarujá Plaza Shopping to the list of greenfileds this year.
Jointly, these projects will add 240,600 m² to total GLA and147,400 m² to owned GLA, increasing the portfolio by 16.8% and 18.5%, respectively.Total own investmentsare estimated at R$766.4 million, 41.4% of which will be disbursed in 2012. Our interest in the projects averages 61.3% and own stabilized NOI is estimated at R$152.0 million.In 4Q11, we opened Mooca Plaza Shopping with 100% of its GLA leased and 85% of its stores open for business.
| Resumo dos Projetos Greenfield |
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| Projects | Total GLA | % Ownership | Owned GLA | % Construction Evolution | (R$% Stabilized NOI million) | Key Money BRMalls (R$ million) | IRR (real and unlev.) | Opening Date | Leasing Status |
| Shopping Estação BH | 37,745 | 60.0% | 22,525 | 81.0% | 26.0 | 12.0 | 19.2% | 2T12 | 85.6% |
| São Bernado | 42,853 | 60.0% | 25,712 | 36.0% | 33.3 | 18.3 | 16.1% | 4T12 | 71.9% |
| Londrina Norte | 32,601 | 70.0% | 22,821 | 50.0% | 16.3 | 5.8 | 13.3% | 4T12 | 45.9% |
| Cascavél | 30,000 | 67.9% | 20,370 | 0.0% | 18.0 | 14.0 | 15.8% | 4T13 | 0.0% |
| Contagem | 33,702 | 70.0% | 23,591 | 0.0% | 29.3 | 19.6 | 16.6% | 4T13 | 0.0% |
| Vila Velha | 63,679 | 50.0% | 32,415 | 0.0% | 29.1 | 9.6 | 19.6% | 2T14 | 23.8% |
| %Adicional | 17% | | 18% | |
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| Total | 240,580 | 61.3% | 147,434 | | 152.0 | 79.3 | | | |
Mooca Plaza Shopping
The Company inaugurated Mooca Plaza Shopping on November 29, with 100% of its GLA already leased and 85% of its stores open. The property was the largest mall to open in Brazil in 2011, consolidating BRMALLS as the leading mall operator in the state of São Paulo. The project added total and owned GLA of 42,000 m² and 25,200 m², respectively, to the Company’s portfolio. Stabilized NOI is R$35.6 million, with a real, unleveraged IRR of 16.1%
Mooca Plaza Shopping is the first large mall in the Mooca district, with a total of 16 anchor stores, including Renner, Marisa and C&A, as well as the first Le Biscuit store in São Paulo and 209 satellite and megastores. It also has a number of leisure options, including a Cinemark movie theater complex (with an Extreme Digital room) and several renowned restaurants such as The Fifties, Gendai and the first Di Cunto and Hocca Bar stores in a São Paulo mall. There is parking for 2,385 vehicles.
Estação BH
Estação BH was scheduled for inauguration in 2Q12 and its opening occured as planned, opening at 23rd of May, 2012.
The mall is expected to generate stabilized NOI of R$26.0 million for BRMALLS. Thanks to the strong pace of leasing, the project’s real, unleveraged IRR is 19.2%.
Shopping Estação BH is one of the first regional mall in the north of Belo Horizonte and will be a benchmark in the region, with 8 anchor stores and 7 megastores, including Lojas Americanas, Dadalto, Livraria Leitura, Fast Shop, Polishop, Centauro, Ponto Frio, Casas Bahia, Renner, Riachuelo, Marisa, C&A, and Leader. Additionally, the mall has 175 satellite stores, including nationally known brands such as Adidas, Chilli Beans, Havaianas, Hering, Drogaria Araújo, Elmo and Luigi Bertolli, adding up to a total of 204 stores in this stage.
The mall mix also consists of Cinépolis, a Mexican movie theater, which has six rooms including three 3D rooms, among other leisure options. The restaurant mix has 35 operations such as Burger King, Mc Donald’s, Bob’s and Pelé Arena Café. To meet the consumer demand the mall has 1,979 parking spaces.
São Bernardo
Progress on Shopping São Bernardo is in line with the original schedule and it is due to open in 4Q12. Leasing has already reached 71.9%.
The São Bernardo mall will add 25,700 m² of owned GLA and 42,900 m² of total GLA for the Company, while generating stabilized NOI of R$33.3 million.The real and deleveraged IRR is 16.1%.
Shopping Estação BH is one of the first regional mall in the north of Belo Horizonte and will be a benchmark in the region, with 8 anchor stores and 7 megastores, including Lojas Americanas, Dadalto, Livraria Leitura, Fast Shop, Polishop, Centauro, Ponto Frio, Casas Bahia, Renner, Riachuelo, Marisa, C&A, and Leader. Additionally, the mall has 175 satellite stores, including nationally known brands such as Adidas, Chilli Beans, Havaianas, Hering, Drogaria Araújo, Elmo and Luigi Bertolli, adding up to a total of 204 stores in this stage.
The mall mix also consists of Cinépolis, a Mexican movie theater, which has six rooms including three 3D rooms, among other leisure options. The restaurant mix has 35 operations such as Burger King, Mc Donald’s, Bob’s and Pelé Arena Café. To meet the consumer demand the mall has 1,979 parking spaces.
Londrina Norte Shopping
Londrina Norte Shopping is part of the portfolio acquired from the Catuaí Group and is scheduled for inauguration in 4Q12, adding 32,600 m² of total GLA and 22,800 m² of owned GLA.
The project is strategically located in the north side of Londrina, in the state of Paraná, at the intersection of two main thoroughfares, with major visibility and easy access. In addition, there is a bus terminal, stadium and car racetrack nearby, which should ensure large numbers of visitors. The mall will be part of a multi-purpose commercial complex, targeting the middle-income group.
There will be 195 stores in all, 45.9% of which have already been leased. Construction is 50% complete.
The Company expects the mall to contribute R$16.3 million in own stabilized NOI, with a real and unlevered IRR of 13.3%
Catuaí Shopping Cascavel
Catuaí Shopping Cascavel will be developed, leased and managed by BRMALLS and is scheduled to open in 4Q13. It is located near the Paul Gorski Ecological Park, between Avenida Brasil, the city's main thoroughfare, and the LagoMunicipal, its main leisure area.
Cascavel has a population of 289,000, according to the IBGE, and is one of the most important cities in Paraná state.The mall will have 165 stores, a 24-option food court, a play area andmovie theater, as well as anchor and megastores, which have already been leased.
We estimate own stabilized NOI of R$20.1 million.
Contagem
In September 2011, we announced a greenfield project in Contagem which will be the Company’s eighth mall in Minas Gerais.Contagem is the second largest city in the state, thanks to its strong industrial park. According to the IBGE, it has a population of 610,000 and per capita GDP of R$24,070, while formal employment is growing at a rate of 4.9%, higher than the national average of 4.4%.
The mall will be regional, attracting locals and people from the surrounding areas. Its catchment area has a population of 505,000 with average monthly earnings of R$3,130. It is strategically located close to the BR-040 highway only eight minutes from the LagoadaPampulha and there are no other malls in its catchment area. Due to the demand for leisure, commerce and services, the project will bring the best brands to the region.
The initial phase will have 35,000 m² of GLA, with approximately 250 stores and 2,500 parking spaces, and is expected to generate stabilized NOI of R$30 million.
Vila Velha
In September 2011, we announced a partnership with strategic local partners for the development of Shopping Vila Velha, our first venture in the state of Espírito Santo and the largest greenfield project in our portfolio.
The mall, which has a total GLA of 64,200 m², will be the biggest in the city. It is located between AvenidaJuscelinoKubistchek and AvenidaLuciano das Neves, next to Vila Velha University. According to a market survey conducted by Gismarket, 70.0% of people in the project’s catchment area are located in the primary and secondary areas, and 84.0% of disposable income in the primary catchment area corresponds to the A and B income groups.
Given the demand for leisure, commerce and services, the project will bring the best brands to the region. The mall’s initial phase will have 274 stores in all, comprising 220 satellite stores, 11 megastores, seven anchor stores and a hypermarket, in addition to a movie theater complex, a games area, a 28-operation food court, a special gourmet center with five restaurants and 3,359 parking spaces.
Vila Velha’s economy is based on tourism, industry, commerce and its port. According to the IBGE, it is the state’s most populous city, with 415,000 inhabitants and per capita GDP of R$13,093. It also has the second highest Human Development Index in the state. The population of the Greater Vitória Metropolitan Region is 1.7 million. We estimate own stabilized NOI of R$26.4 million.
Expansions
Timeline
We currently have seven ongoing expansion projects, which will add total GLA of 77,600 m² and owned GLA of 36,300 m²respectively, expanding our current portfolio by 5.4% and 4.6%, respectively.We expect these expansionsto add own stabilized NOI of R$58.0 million for the Company.
The projects will require investments of R$358.1 million on the part of BRMALLS, 21.4% of which had been disbursed by the end of 2011, and the timetables and budgets remain on schedule. We will continue to analyze opportunities for creating value from our existing assets.
| Expansions | Total GLA | % Ownership | Owned GLA | % Construction Completion | Stabilized NOI (R$ million) | Key Money BRMalls (R$ Million) | IRR (real and unlev.) | Opening Date | Leasing Status |
| Shopping Recife | 10,674 | 30.8% | 3,288 | 75.2% | 5.1 | 4.3 | 28.1% | 2Q12 | 68.7% |
| Center Shopping Uberlândia | 1,922 | 51.0% | 980 | 0.0% | 1.8 | 1.1 | 21.6% | 3Q12 | 0.0% |
| Natal Shopping | 8,689 | 50.0% | 4,345 | 0.0% | 6.1 | 1.6 | 16.2% | 1Q13 | 0.0% |
| São Luís | 23,221 | 15.0% | 3,483 | 0.0% | 2.2 | 1.1 | 19.7% | 1Q13 | 0.0% |
| Plaza Shopping | 10,546 | 100.0% | 10,546 | 34.4% | 22.5 | 16.6 | 14.1% | 2Q13 | 73.3% |
| Independência Shopping | 7,231 | 83.4% | 6,034 | 0.0% | 7.9 | 4.2 | 15.0% | 2Q14 | 0.0% |
| Top Shopping | 15,336 | 50.0% | 7,668 | 0.0% | 12.5 | 5.4 | 13.3% | 2Q13 | 0.0% |
| Total | 77,619 | 46.8% | 36,343 | | 58.0 | 34.2 | | | |
| Total BRMALLS | 1,433,526 | | 798,188 | | | | | | |
Inauguration of the Shopping Campo Grande Expansion
The Shopping Campo Grande expansion was inaugurated on November 24, having been 100% leased since 3Q11. Prior to the opening, the mall already had a maximum occupancy rate and good delinquency numbers.
The project added 5,400 m² of total GLA and 3,700 m² of owned GLA, increasing the mall's total GLA by 15.9%. The Company expects the project to generate stabilized NOI of R$5.3 million, with a real and unleveraged IRR of 16.5%.
Recife Expansion
With more than 400 stores, the Recife mall is the largest in Pernambuco, with more than 30 years of operations and a history of consolidating the state market. The mall recorded an average vacancy rate of around 0.2% in 2011, with an occupancy cost equivalent to 9.0% of tenants’ sales, and SSS growth of 12.2%, above the Company’s average.
This expansion will add 7.548 m² to the mall’s total GLA and 2.325 m² to the Company’s owned GLA, increasing its presence in the Northeast of Brazil.
The project is expected to add R$5.1 million in stabilized NOI, with a real, unleveraged IRR of 28.1%.
Uberlândia Expansion
The Center Shopping Uberlândia mall was inaugurated in 1992 and is now a mixed-use complex that contains shopping and leisure facilities, hotels and offices, with a total of 30,000 people visiting its facilities on a daily basis. The mall posted SSR of 20.9% in 2011.
This project will expand the mall’s total GLA by 3.7% to 1,900 m2, adding stabilized NOI of R$1.8 million per year, 4.8% up on the 2011 figure, with a real unleveraged IRR of 21.6%. Inauguration is scheduled for 3Q12.
This expansion is expected to be completed by 3Q12 and has an IRR (real and unleveraged) of 21.6%.
São Luis Shopping Expansion
Inaugurated on November 20, 1999, São Luis Shopping was the first regional mall in Maranhão, according to Abrasce.São Luis, which has a population of 1.2 million, according to the IBGE, is one of the 14 state capitals in which we have malls.The mall has been posting excellent indicators,with SSR of 18.1% in 3Q11.The expansion will add 23,221 m2of total GLA, an increase of 68.1%.We expect the 3,483 m² of owned GLA to generate stabilized NOI of R$2.2 million, with a real and unleveraged IRR of 19.8%.
Shopping Independência
Shopping Independência is the first major mall in Juiz de Fora, Minas Gerais, and the only one within a 100km radius. Developed by BRMALLS, it has been extremely successful in terms of sales since it opened in April 2008. In 2010, it recorded SSS growth of 20.5% and an occupancy rate of 99.3%.
The expansion, which will be concluded in 2Q13, will add 7,231 m² of total GLA and 612 new parking spots, giving a total of 30,686 m² of GLA and 1,912 parking places. We estimate that the project’s 6,034 m² of owned GLA will generate stabilized NOI of R$6.8 million for the Company, with a real unleveraged IRR of 15.1% p.a.
Natal Shopping
Inaugurated in 1992, Natal Shopping was the first mall to be installed in the capital of RioGrande do Norte. With a privileged location in the city’s south side, where the most upscale neighborhoods are located, Natal Shopping will undergo expansion and renovation works, which are expected to be concluded in 1Q13.The expansion will add 8,688 m² to total GLA (an increase of 51.5%), 876 parking spaces, including a parking deck, and a movie theater.
We expect the 4,344 m² of owned GLA will add stabilized NOI of R$5.3 million to BRMALLS. The project’s real unleveraged IRR is estimated at 14.1% p.a.